November 18, 2010

Arizona ArtBeat

We explore an exhibit featuring the work of metal artists from Arizona State University’s School of Art. It’s a diverse collection of thought-provoking and, at times, humorous works created using a variety of techniques. We’ll visit the gallery, but we’ll also take you into the studios and minds of the artists. Small Metals – Big Ideas is this week’s focus for our ongoing series, Arizona ArtBeat on Horizon.

Ted Simons:
Tonight we begin our new "Horizon" series, Arizona art beat. Producer David Majure and photographer Scott Olson take us to a place where artists prove their mettle.

David Majure:
They manipulate metal with ferocity and finesse. Celebrating its strengths.

David Majure:
Exposing weaknesses, using fire and water, tools and talent, they gradually persuade it to bend to their will. Those are graduate students in ASU school of art, they're pursuing master of final arts degrees with an emphasis in metal.

Becky McDonah:
My students get a lot of training in different techniques and are allowed to explore a lot of things that aren't always available at every university. So they come out with a really good skill set. Things they know how to do and I think that helps them express what they're -- express what they're trying to express.

Sam Troxell:
The piece is called "into the drink." It's a hand-raised vessel. Started out as a big copper sheet and I raised it up using hammers and wooden stakes.

David Majure:
Sam Troxell says he finished in two weeks but the technique took 10 years to learn.

Sam Troxell:
It's hard material. Difficult. Tough. When I say difficult and tough, the material is tough. I think the ideas and the ways of coming up the artwork is the same. You have your concept, your muse and things that intrigue you about the material and what you can make.

David Majure:
After creating a picture, his idea blossomed more.

Sam Troxell:
It's a bigger idea. This is maybe a whimsical story of a bug. And so it's expanding on your imagination. Making it grander than what it is.

David Majure:
Small metals, big idea, by students, and faculty and alumni. It's at Tempe marketplace in the middle of an outdoor shopping mall.

Leon Nash:
It isn't like normal galleries where people know they're going to look at art. Here they're basically coming -- going shopping or going to eat or whatever.

Becky McDonah:
That's what it special. The traffic you get through isn't necessarily the normal people going out to seek an exhibition.

Leon Nash:
I'm Leon Nash. The name of the piece is "X." I was thinking about armor and shields and along those lines when I was making this piece.

David Majure:
It's a combination of styles and techniques. Including a chain mail-like mesh that Leon's been experimenting with for a while.

Leon Nash:
I think my favorite part is designing what part is going to happen when. With stuff like this, trying to figure out sizes and where it's going to go and how it's going to be connected, I think -- I think that's the most fun for me.

David Majure:
It can take precise calculations to do the job right.

Leon Nash:
That's the funny thing. I'm not great at math but it makes you feel a little better. But yeah, that's where I spend most of my time is drawing it up and designing before I start something like this.

Michelle Startzman:
I think out of everything I made, the bowl is wearable.

David Majure:
Michelle Startzman is uses enamel in her pieces.

Michelle Startzman:
It's one way to add color into the metalwork. That's a type of glass used on of metal.

David Majure:
Ocean themes and parts of cameras are included.

Michelle Startzman:

I inherited a lot of cameras from my grandfather when he passed away and wanted to do something with some of them because that's important to me.

Becky McDonah:
When you look at metal, you have the flat surface, well, but to give it a personality is what is really exciting about it. I love working with the metal but also love working with the ideas too. This piece is entitled "hearing protection protecter" and it would traditionally house the bones or other attributes.

Ted Simons:
Protected inside this one is two ordinary earplugs.

Becky McDonah:
It's humorous. And as far as the approach to creating it, the ear is a technique, using smaller tools that's formed in something called pitch. You can see what the pitch is doing. As far as how it's supporting itself, or the metal up in this, it collapses where my tools are taking it.

David Majure:
Her shrine to hearing protection, is adorned with hearing aid batteries she collected.

Becky McDonah:
And surrounding areas as well. But stories along with the piece are important to me, along with making it, I'm interested in like what was -- what was the reason for hearing loss. Things like that. And I got a lot of different things, not just, oh, old age and it went away. But stories about like loud guns during the war. Working for a machine shop. One was a car accident.

David Majure:
She feels like those personal stories add another level of meaning to her often unusual art.
Becky McDonah:
I do want to have a conversation piece out there and whatever -- you know, I can't assume what those conversations would be, but as long as there's some sort of conversation, I think that -- that's something that I enjoy about it.

David Majure:
But forging ideas and telling stories in metal takes time. It's an art form that requires skill and a heavy dose of patience.

Becky McDonah:
If you've got it, you'll eventually reach what you desire for your outcome for your piece.

Ted Simons:
The exhibition, small metals, big ideas, runs until November 28th at the night gallery in Tempe marketplace. The gallery is a partnership between the Vestar Development company and ASU. It's open from 6:00-9:00 p.m. Tuesday through Sunday.

Economic Impact of SB 1070

A new report blames Arizona’s immigration law for more than $140-million in lost revenue. Senior Vice President and Economist for Elliott D. Pollack & and Company, the firm that conducted a study the report is based on, talks about the data.

Guests:

Jim Rounds - Senior Vice President and Economist for Elliott D. Pollack & and Company

Ted Simons:
Good evening and welcome to "Horizon." I'm Ted Simons. A new report indicates that a boycott tied to Arizona's immigration law has cost the state more than $140 million in lost conference and convention business. The center for American progress released the study. It was conducted by Elliot D. Pollack & company, a local economic firm based in Scottsdale. Here with more about the study is Jim Rounds, senior vice president and senior economist for Elliot Pollack & company. Thanks for joining us. Good to see you. What did you look at in this study?

Jim Rounds:
Not only in total of economic activity but the GDP figure but in terms of the general fund tax collections and the things we were able to capture, what is the economic impact in tax revenue losses associated with those conferences and convention that is formally identified they weren't going to come to Arizona and then we took a look at reductions in bookings for future events -- that's pretty much a proxy for picking up what we're missing and we're not hearing about. When you add those together, it gives you a chance to approximate.

Ted Simons:
What did you find?

Jim Rounds:
We found that in -- we could only pick up what I think after look agent this quite extensively about half the economic losses in our particular analysis and so what it came down, to there's a lot of economic activity but ends up being the lost economic activity is one-tenth of a percent. Smaller than anticipated. The job losses in terms of 2700 job losses related to S.B. 1070 compares to 2.4 million jobs throughout the state but the bigger one is even if we double our estimated impact which again I think we caught half. So if we double it to capture half the activity, the impact to the general fund is going to be roughly $10 million this year, the following year and the year after that, for a total of about $30 million. It sounds impressive but when in the context of the overall general fund budget of about $6.5 billion, it's not that much.

Ted Simons:
Talk about though -- and we've heard this from tourism and convention folks on the program, not only what they're missing now, but the phone calls -- and you touched on this, the phone calls not coming that will impact in three, four years, somewhere along the line. Is there -- how close can you get to something like that?

Jim Rounds:
That's another area where we captured about half. The Phoenix convention center, they were down 33% in terms of bookings they were expecting. But the economy is a little bit better than last year and at worst, we thought they would have been about the same as last year. But down 33%, that means it's having an impact. But when you translate that into lost general fund tax collections while is sounds impressive. One, it's a transitory event. Arizona is carrying the water for the immigration reform. The next session, maybe more states will try to replicate what Arizona did with S.B. 1070 and a lot of other states will be getting that attention too. I think we captured about half the activity and it's a guestimate but gives you an idea the scale. It's not so much the exact estimate. If it was we lost $25 million versus $35 million or $40 million, the exact number doesn't matter. It's not nearly as big as some were portraying it to be. I think the biggest impact wasn't S.B. 1070. I think it was the legislature sweeping a large amount of tourism advertising money from the budget last year. That's impacts the -- impacted the state about three times more than S.B. 1070.

Ted Simons:
Could that be exponential?

Jim Rounds:
I think $30 million, when the state has a billion dollar deficit this year, $30 million is still significant but really, I think that's something that some conservative lawmakers could live with. The tourism losses could be three times that amount. Maybe more. Our calculation related to the sweeping of the funds last year, for every dollar we cut from the tourism budget, we lose about three. While it was used as a budget balancing tool, I think it worsened the situation and what I would like to see happen, the legislature restore the moneys in tourism and it will offset the impact of S.B. 1070.

Ted Simons:
The idea though -- and maybe it's included in the lost aspect, we can't figure out for now. But the idea people moving here, the idea of relocating. Whether it's business, whether it's families and residential, these things. Can you factor that in there?

Jim Rounds:
It's hard to factor in families moving here. The economy is such that it's worse in Arizona than it is across the nation but still a lot of individuals upside down in their homes, having a hard time finding jobs or managing wealth. They're not going to be moving to the state. When they get their financial house in order, they'll be interested in Arizona only after we create jobs. I don't think they're not coming because of S.B. 1070. I think it's impacted by the fact we don't have a diverse economic base but on the business side, I talked to site selection people and they said on occasion, one of the businesses that might be considering Arizona brought up the fact there's interesting things going on with S.B. 1070 and how we're dealing with immigration, how is that going? Now let's talk about the numbers and what you can provide in terms of tax credits or are you going to modify business taxes and things. It hasn't directly impacted us. At least talking to the people that bring businesses to Arizona.

Ted Simons:
It's in the conversation?

Jim Rounds:
Only in the beginning. I'm not worried about it right now. I'm worried if maybe we continue to push the edge of the envelope on immigration reform and continue to be in the news. Let's say 25 states decide to implement what we did last year and we take it one step further and leading the news across the country.

Ted Simons:
The 14th amendment, for example.

Jim Rounds:
If we decide to do that, I think there could be a cumulative effect over time. I would like to see that la -- lawmakers did what they thought they had to do, but they need to focus on jobs and I've heard certain lawmakers say that jobs will be the number one priority and immigration second. They need to take that seriously. We need to make changes.

Ted Simons:
The impact of state services from perhaps fewer illegals because of perhaps S.B. 1070. How is that factored in?

Jim Rounds:
That's not part of the math we provided to the center for American progress but thought it was relevant. We provided the math, we didn't write the report. I think that's critical because a lot of people don't understand that let's say you take a family of four, if you end up having a family of four and there's two kids in school, you have to be making well above median income before you're a net contributor to the state coffer. Until you hit a threshold, you're receiving more benefits than providing tax dollars. I don't want to say drain on general fund but that's how the math works out and that has to be considered and now that we have estimates for the losses in terms of that particular segment of the population and people do math, it's possible that the savings are going to be greater than the costs that we identified.

Ted Simons:
Last question, quickly here, you mentioned your report did the math and your clients went ahead and released the report. Sounds like they saw something that you either weren't emphasizes or you're emphasizes something they're choosing to put a lid on.

Jim Rounds:
There was a disconnect. The math is accurate, we provided accurate facts. This is something we're very good at. The problem is in interpreting the results. Their interpretation was more -- we lost $30 million over three years, it's a scare tactic. They tend to work in the shorter term. They want the other states to follow suit. Mine is there's a lot of unintended consequences associated with this, like having reductions in tourism employment. Well, who tends to be an employee in the tourism industry? Lower income individuals and including immigrants. Lowering -- lower income individuals, possibly immigrants. The dollar amount wasn’t the story. They thought that was the story. That's fine; they can promote it the way they want. But our job is to get the accurate facts out so our policy makers can make wise decisions.

Ted Simons:
All right Jim, great having you here.

Real Estate “Flopping”

The days of flipping houses has passed, but now there’s a new concern: flopping. Arizona real estate reporter Catherine Reagor explains how investors are using this strategy to take advantage of a depressed housing market.

Ted Simons:
The days of flipping houses may have passed, but now there's a new concern. Flopping. It's a strategy used by investors to take advantage of a depressed housing market. Here to explain how it works is Catherine Reagor, real estate reporter for "The Arizona Republic." Thanks for joining us what is flopping?

Catherine Reagor:
It's revolves around short sales. Big underwater, like Jim said, are trying to sell and where the lender agrees to take less money than what's owed. A short sale. 20,000 in the metro Phoenix. A lot. These flop scams, what a group does is convince a lender to take less than what the house might be listed for and if the house was listed for $200,000. But $250,000 was owed. They might convince the lender to take $150,000. The market is really depressed and the lender agrees and they turn around and flop it for $280,000 because that's what the market would pay.

Ted Simons:
You've got a house for sale for $200,000. You owe $250,000. I'm an agent and say, listen, let's get $150,000 out of this thing and call it a day. You'll be free, the bank says fine. But unbeknownst to you and the bank, I'm trying to sell you at $150,000 meanwhile I've got a buyer for $180,000?

Catherine Reagor:
Yes. And there are real estate agents who may not be aware. Because of what it does to the comps and there are sophisticated groups doing this and there's so much going on, the regulation is tough to catch something like this, but sometimes they'll do it within days. Have both deals signed up. The lender doesn't know about the second deal and that's essentially defrauding the lender because the lender is supposed to get the most for the loan. If everyone signs off, then the lender is defrauded.

Ted Simons:
You mentioned 20,000 of these deals.

Catherine Reagor:
Short sales.

Ted Simons:
How common is this particular flopping? Not that you can figure out who is doing it.

Catherine Reagor:
At least 5% of all sales in the past year are doing this. And the FBI is targeting it, national group said it could cost lenders up to $50 billion this year. Nationally. Regulators here locally are looking at it. It not only defrauds the bank, it hurts the homeowner. And hits their credit record and if it sells for less that they could get, they can owe more to the lender and owe more in taxes.

Ted Simons:
Lets play devils advocate, hey, I've got your house sold, hey, I got this guy into a house, a couple of sales, as an agent, I've got two transactions and not that ethical there. But we've got things moving, and buying and selling and moving forward.

Catherine Reagor:
And if you're a homeowner and struggling and many homeowners aren't aware of what's going on. Great, I'll get the deal and the lender agreed. They're not sure of the ramifications but it skews the comps and sales because it's two sales for one sale and the house would sell for more. And in some cases, buyers would take more but sometimes their offers aren't getting taken. So that middle profit --

Ted Simons:
You wrote about how some agents are escalating the asking price, knowing no one is going to go for that deal.

Ted Simons:
They're lowering it, in some cases. Keeping it high and knowing that no one will buy it and then along comes -- they're able to convince the lender, I'm going to lower it for $50,000, the buyer comes in and purchases it, the lender is out of the deal and then they flop it for more money. Now, many market watchers, lenders, real estate agents and title agency people are very angry about this because of what it does to the market and in some case, title agencies were presented both deals and they have many -- many firms start rejecting them because there's so much concern over them. And Fannie Mae and Freddie Mac say if you do a short sale, the property can't flip for so many days. And how they regulate that, I don't know.

Ted Simons:
Isn't it against the law to conceal information from a lender?

Catherine Reagor:
It's bank fraud and unfortunately, right now, there's not a lot of sympathy for the lenders in some cases and you think, well, it's going to hurt the lender, but it does, and those are losses that come back to the taxpayer. Federally backed loans and the bank bailout and that's what is making some angry, the bigger implication.

Ted Simons:
The government-backed loans. What's being done about this?

Catherine Reagor:
Nationally, the FBI, I know they're looking into -- and other federal regulators, they've come and talk to specific firms and the Arizona association of Realtors, Judy Lowe, is very concerned because she doesn't regulate -- but when you're a real estate agent and sign on to a homeowner to get the best deal, it's ethical and if that hurts the ethics and the industry, that's an issue. And you know, other -- attorney general, very cognizant of this and looking into it because we don't need anything else working to hurt the housing market right now.

Ted Simons:
Right, right.

Catherine Reagor:
And fraud, you know, with what we're dealing with the fraud cases coming out from five years ago, more issues of fraud, mess up the market.

Ted Simons:
It sounds like something that real estate agents themselves will have to do a better job in terms of self-policing, if not just plain ratting on other agents when they know this is going on. Is that asking too much of the folks?

Catherine Reagor:
Arizona has great real estate agents and they're strong and care about the consumer and will do that. There are out-of-state groups doing it. They're very sophisticated and know how to -- and in some case, soliciting real estate agents. Bring me a short sale, we can make this work with an investor. It's shine can the light on it and saying it's illegal. You didn't realize it's defrauding banks and people stop.